Verizon-AOL deal is 'brilliant,' analyst says

Verizon agreed to buy AOL for $4.4 billion, the two companies announced Tuesday. The deal gives Verizon a great video advertising platform and AOL the financial freedom to develop original programming.

Mark Lennihan/AP

An AOL logo is posted outside the building where the company's headquarters is located, Tuesday, May 12, 2015 in New York. Verizon is buying AOL for about $4.4 billion, advancing the telecom's push in both mobile and advertising fields.

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May 12, 2015

By Fred ImbertCNBC

CNBC's Jim Cramer said Tuesday he believes Verizon and AOL will benefit from their $4.4 billion merger deal.

"AOL are the only guys who have figured out programmatic [advertising] for video. This is a great way to take on Google," Cramer said on CNBC's "Squawk on the Street." "I think that [AOL CEO] Tim Armstrong will be very happy because [Verizon CEO] Lowell McAdam … will let him do what he wants, which is to develop great programming and have a tremendous ad distribution platform. This is a brilliant move by Tim."

Cramer made his remarks after Verizon announced it will buy AOL for $50 per share, or about $4.4 billion by this summer.

Armstrong said this was the next step for the company to continue growing.

"If you look at AOL over the last five years ... we turned the company around. We outperformed the S&P 500 for the last five years, and when you look at where we are today and where we're going, we've made AOL as big as it can possibly be in today's landscape," he said in a CNBC "Squawk Box" interview after the announcement. "But if you look forward five years, you're going to be in a space where there are going to be massive, global-scale networks, and there's no better partner for us to go forward with than Verizon."